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 You are in: Special Report: 1998: EU Enlargement  
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EDITIONS
EU Enlargement Tuesday, 10 March, 1998, 17:36 GMT
Slovenia: country report
Slovenia and its neighbours
The European Commission has recommended that negotiations to join the Union should begin with Slovenia, Estonia, the Czech Republic, Hungary, Poland, and Cyprus.

The Commission's report on Slovenia is summarised below.

Most of the power in Slovenia lies in the hands of the Prime Minister, Janez Drnovsek, who was also senior politician during the communist era. Under the guidance of Mr.Drnovsek and President Milan Kucan, Slovenia has become the most prosperous country in ex-communist Europe.

Relations with the EU have overall been constructive and smooth but the legislative and constitutional issues which have delayed Slovene ratification of a previous agreement with the EU have constrained the development of the relationship, despite Slovene willingness to comply with the terms before it was agreed.

Slovenia has the characteristics of a democracy with stable institutions guaranteeing the rule of law, human rights and respect for the protection of minorities. However, the Slovenian judiciary can be inefficient and has a problem with the amount of time it takes to hand down judgements. It can take five years before a civil case is brought before the courts.

Slovenia can be regarded as a functioning market economy. It has advanced considerably in liberalisation and privatisation, and achieved a successful stabilisation of the economy. However, there is a lack of competition in some sectors, in particular the financial sector. The working of the market mechanisms still needs some improvement, and the necessary reforms of the fiscal and social security systems are not yet completed.

Slovenia should be able to cope with the competitive pressure and market forces within the European Union in the medium term, provided that the rigidities in the economy are reduced.

It has a diverse export base, the workforce is skilled and highly trained, and infrastructure is relatively good. However, enterprise restructuring has been slow due to the consensual character of economic decision-making, and the incentives of workers and managers to preserve the status quo.

Improvements in competitiveness have been hampered by rapid wage growth combined with low productivity growth. The low level of foreign direct investment reflects these structural problems, which need to be tackled.

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